In the second half of 2004, the government of Israel attempted to take thousands of acres of private Palestinian landholdings in the Jerusalem area and transfer them to the State Development Authority. By all indications, this was the first systematic application of the Absentee Property Law in East Jerusalem since 1967.

While the government has refused to reveal the precise number of landowners affected, Ir Amim uncovered the law's application along the southern municipal border of the city, between Jerusalem and Bethlehem. It seems that the impetus behind the takeover were state plans to construct new housing projects along the separation barrier.

The Jewish neighborhoods planned for this area will serve to interrupt the territorial contiguity between the Palestinian neighborhoods inside Jerusalem and those on its periphery. The barrier, thus reinforced with neighborhoods, will cut off Palestinian Jerusalemites from the surrounding West Bank and in so doing break the economic, social and familial ties between the two. Moreover, it will prevent a geographic connection between East Jerusalem and a future Palestinian state.

Completion of this project would thwart a settlement that establishes a single Palestinian metropolitan area from Bethlehem in the south, through East Jerusalem, and up to Ramallah in the north. It may also undermine the very chances of reaching a negotiated agreement between the two sides.